Scotland's housing market's performance has been dominated by ?events? over the past decade and more, beginning with the collapse of Northern Rock at the end of 2007, which signalled the end of the mortgage credit boom across the UK. It was followed by a deep economic recession that dragged the housing market down with it - in Scotland, the total market value of residential sales fell by 76 per cent from Q3 2007 to Q1 2009.

During the succeeding years of bank bailouts, stimulus packages and rising unemployment, the housing market remained in a deep slumber. It only really awakened from the middle of 2013 thanks to a recovery in economic growth and stimulus packages, such as Help to Buy. The years since 2013 have seen modest recovery, but total market value remains 24 per cent down on its 2007 peak. Ongoing events such as referendums, tax and legislative changes continue to impact on market sentiment and activity. Growth in total market value over 2018 was very marginal.

Some areas have performed better than others. Whereas the Edinburgh market is now only 15 per cent off peak levels, Aberdeen, Dundee and Glasgow remain 35 to 40 per cent down on where they were in 2007.

With another major event on the horizon - Brexit - we cannot expect any significant recovery in the housing market over the next year or two, regardless of whether we leave the EU on 'soft? or ?hard? terms. The likely negative impacts on the economy and consumer sentiment will probably result in the market levelling off at best. Although a similar crash to 2007-09 levels cannot be discounted, it appears unlikely this time due to the better health of our banking sector. However, while a significant downturn in transaction levels, perhaps this time of 15 to 20 per cent, could still be on the cards, unless there is a significant move in interest rates house prices would be expected to level off rather than decline, as was broadly the experience in the 2007-09 recession.

Although the recent RICS UK Residential Market Survey painted a gloomy picture of future expectations across the UK, including in Scotland, this does not yet appear justified by a consideration of the key market indicators and drivers. Importantly, mortgage lending is still on the rise, particularly for first-time buyers who remain very much the ?life blood? of the market.

In the wider residential market, the key trend over the last ten years has been the drift, particularly for younger people, from owner occupation to the private rented sector (PRS). This trend could continue given affordability issues in the market, as well as lifestyle choice. To meet this demand, the Build to Rent (BTR) sector is emerging quickly in parts of the UK - there is now a pipeline of over 6,000 such units in Scotland.

John Boyle will be speaking at the forthcoming Mortgage Market in Scotland Seminar. You can view further details and book your ticket here.